Self-financing in the form of personal and family savings is the No. 1 form of financing used by most small-business owners. It's low-cost and has other advantages. For instance, when you approach other financing sources, such as bankers and venture capitalists, they will want to know exactly how much of your own money you are putting into the venture. After all, if you don't have enough faith in your business to risk your own money, why should anyone else risk theirs?
Excerpted from Grow Your Business